Eyeworld

OPHTHALMOLOGY BUSINESS 70 April 2015 by Roger S. Balser Paint" and have you walking away from the Derby smelling like roses. Tip #1: Don't bet every race— be patient and selective A typical day at the track has a 10- race card. The most exciting time at the racetrack is when the race is go- ing on. However, the time between races can be like watching paint dry. There's a temptation for bored bettors to place a wager on every single race, which is a big mistake. Not every race is worth wagering on. In some races your strategy hasn't identified a clear favorite; in others the risk/reward factor is too low. The same can be said for in- vesting. There's an itch to want to change your portfolio every day. But the fact is that sometimes the best course of action is no action. Disciplined traders and investors will wait for a buy or sell price signal before making a move. That signal Stepping up to the betting windows of investing A day at the races W ith the 141st "Run for the Roses" fast approaching, my thoughts have turned to the Kentucky Derby and horse racing in general. During "Derby Week" the city of Louisville comes alive with the sights and sounds of rabid horse racing fans. If your only familiarity with horse rac- ing is a weekday afternoon at your friendly neighborhood racetrack, then it's probably difficult for you to picture exactly what the Kentucky Derby is like. The place is filled to capacity. "Millionaires Row" is crowded with A-list celebrities. The grandstands teem with cigar smoke, plaid jackets, straw hats, and attention-grabbing fashion statements. Yours truly will be rail-side in a clubhouse box seat, could take days or weeks to show it- self, which means you must remain patient and be very selective. Tip #2: Terminate the losers Choosing winners isn't easy. How- ever, if you can get rid of the losers, you're more likely left with a group of winners. It's like taking a multi- ple-choice test. You have 4 possible answers, and you can easily elim- inate 2 answers that are definitely wrong. So you've doubled your percentage of success from 25% to 50%. It's the same at the racetrack. I evaluate a race by drawing a line through those horses that have no chance of winning. You can do the same with investing. If your goal is to outper- form the Standard and Poor's 500 (S&P), you need to own investments that are performing better than the index. One of the best tools to help you determine whether your invest- far from the debauchery of the track's infield (where I first cut my teeth on Derby betting). If you were new to America and your only experience with horse racing was the Kentucky Derby, then you would conclude that horse racing is the most popular specta- tor sport in America. You would be wrong, of course, but your conclu- sion would at least have an element of logic to it. On Derby Day there are hun- dreds of thousands of people—many of whom don't know a thorough- bred from a nag—who wager tens of millions of dollars as if they were the owner and breeder of Secretariat. The wagering is a sport in itself and holds many similarities to investing. In both "sports" the educated wager (or your investment) generally wins the purse. So in honor of the Ken- tucky Derby, here's a tip sheet that will keep you from betting on "Old

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